SYDNEY/MELBOURNE/PARIS (Reuters) - Europe’s biggest property firm Unibail-Rodamco is to buy U.S. and UK mall operator Westfield Corp for $16 billion, in a defensive move to create a global leader in a sector grappling with the online shopping challenge led by Amazon (AMZN.O).

A Westfield Corp sign adorns the side of a building in central Sydney, Australia, December 12, 2017. REUTERS/David Gray

The deal gives Europe-focused Unibail UNBP.AS, which owns ‘Les 4 Temps’ and ‘Forum des Halles” in Paris and has centers spreading from Helsinki to Valencia, exposure to the United States and Britain, where Westfield WFD.AX operates 35 malls, including landmark premises in London.

Talks to seal a deal had taken just six weeks, said Lowy whose family will no longer run the company he set up in 1960 but will end up with a 2.8 percent stake in the combined group.

Lowy said it made sense to sell because Unibail offered a “very good price”, but acknowledged that the sale partly reflected global consolidation and the pressure on retailers.

A tough consumer spending environment and intense competition from online rivals has made retailers more selective with their expansion plans, making life tough for shopping center operators and driving consolidation in the sector.

Around 37 percent of the combined entity’s portfolio would be in France and 22 percent in the United States.

“Westfield is the best fit for us and a natural extension of our strategy,” Unibail’s chief executive Christopher Cuvillier said following the announcement of the proposed deal, which would be worth $24.7 billion including debt.

Unibail is focused on large sites with heavy pedestrian traffic and high-profile tenants such as Apple, Zara and Primark and analysts said it would gain from importing the Westfield model.

Under the terms of the deal, Westfield shareholders would receive cash and shares totaling $7.55, or A$10.01, an 18 percent premium per share. The shares were halted earlier on Tuesday pending the announcement, having last traded at A$8.50.

Shares in Unibail-Rodamco, which was formed in 2007 by the merger of France’s Unibail and Dutch-based Rodamco, were down 4.0 percent at 1500 GMT, with analysts at Kepler Cheuvreux saying that the deal looked expensive.

RETAIL REINVENTION

Shopping center owners are scrambling to reinvent themselves to keep up with rapid changes in consumer behavior, with the expansion of e-commerce giant Amazon.com coinciding with an explosion in online purchases, while consumers increasingly treat malls as places for socializing and window shopping.

Once dominant United States department store operators such as Macy’s Inc (M.N) and J C Penney Co Inc (JCP.N) have announced plans to shut hundreds of stores in recent years, putting pressure on landlords to find new “anchor tenants” or come up with new ways to grow returns.

“Westfield has got assets in the UK and in the U.S. that are all in mature Amazon markets. They’re already 50 percent through that online retail switch,” Morningstar analyst Tony Sherlock said of the deal.

The Lowy family, which owns 9.0 percent of Westfield, said they would rather be investors than executives after putting in a combined 145 years at the company, which has stakes in 18 suburban U.S. shopping centers, three of which it wholly owns.

Deutsche Bank (DBKGn.DE) and Goldman Sachs (GS.N) have committed to provide 6.1 billion euros in funding to cover the cash portion of the offer, Unibail said.

Unibail was helped by very cheap European debt in the 2.0-2.5 percent range and synergies that will result in about $100 million in cost savings, said Scott Crowe, chief investment strategist at real estate focused CenterSquare Investment Management in Philadelphia.

“They’re all throwing in the towel because they need to drive efficiency through consolidation, which is a direct result of e-commerce,” Crowe said of mall owners.

Reporting by Byron Kaye in Sydney and Sonali Paul in Melbourne; Additional reporting by Swati Pandey in Sydney and Susan Mathew in Bangalore, Geert De Clercq, Blandine Henault, Matthieu Protard and Maya Nikolaeva in Paris; Editing by Lincoln Feast and Alexander Smith